ILO Director-General says policy makers need to reconnect with the needs of working families and put job creation at the centre of economic recovery efforts

The Director-General of the International Labour Organization (ILO), Mr Juan Somavia, warned that “dark clouds” are gathering again in Asia, even as growth rebounds and investment is flowing back. Asia’s economy is more open than ever before but with the risk of the global economy slipping into a double-dip recession, this openness has positive as well as negative implications.

Press release |
Kyoto, Japan | 04 December 2011

Kyoto (ILO News): The Director-General of the International Labour Organization (ILO), Mr Juan Somavia, warned that “dark clouds” are gathering again in Asia, even as growth rebounds and investment is flowing back. Asia’s economy is more open than ever before but with the risk of the global economy slipping into a double-dip recession, this openness has positive as well as negative implications.

Mr Somavia was addressing the opening session of the ILO’s 15th Asia-Pacific Regional Meeting (APRM) that began in Kyoto today.

“While the global growth model developed over the last three decades may have served some countries in the region well economically, it has also proven to be unbalanced, unfair, and unsustainable. It has created inequalities, new environmental challenges and major decent work deficits. If left unaddressed it will threaten both social cohesion, political stability and long term development”, Mr Somavia warned. “The world and Asia need a new vision of growth and development that can open the way to a new era of social justice”.

The Director-General cautioned that it would be a “serious mistake” to misread the critical moments we are living through as primarily a crisis of confidence of financial markets in the Eurozone. “On the contrary, there is a growing feeling in many quarters that our multilateral governance frameworks and even many national political systems are not coping well with the power of global financial operators. It is urgent to maintain and regain the trust of people in the ability of governments to make public policies for the benefit of working families and their communities and in favour of businesses and entrepreneurs of the real economy”.

Popular uprisings as in the “Arab world”, mass protests, demonstrations, riots and other expressions of anxiety and danger are on the rise.

Mr Somavia said that young women and men have led many such protests expressing frustration and anger over economic exclusion and lack of genuine opportunity. “Some are combined with regime change and democratic aspirations. Others are in reaction to exceptionally harsh austerity measures affecting the most vulnerable who have no responsibility for the crisis, or because of continuously rising inequality and social fairness issues. But in all places the demand for a fair chance at a decent job is present.”

“Global policy makers need to reconnect to the needs of working families and tackle the global jobs crisis at its roots. It is vital to put in place global policies and measures that stimulate investment in the real economy with productive enterprises that generate decent jobs, absorb informality and significantly reduce the space for unproductive financial operations”.

The Director-General said that reform of the global financial service industry is essential with a return to what has been called “boring banking” - lending - for innovation, productive investment, trade and consumption.

Mr Somavia also outlined the key policy challenges that the APRM delegates will address during the conference, along with the steps needed to shape a model of growth that is more socially and economically efficient.

The first challenge is the development of a more efficient, more equitable, job-rich growth pattern. Secondly, the building and strengthening of social protection floors to protect the most vulnerable and poorest, in particular. Countries must unlock the potential of small and medium enterprises. The development of green jobs and a just transition to a low-carbon economy are also key. Governments also need to establish more inclusive and fairer labour markets that uphold international labour standards and rights at work, with social dialogue at the core. There must be support for regional co-operation and integration. Finally, young people must have access to decent employment opportunities.

The Director-General recalled a Japanese saying that states, ‘Vision without action is a daydream; action without vision is a nightmare’. “I believe that an economy without a moral compass produces a nightmarish existence for too many”, he said, adding that this is why the decent work vision is so important. “There is much still to be done but the vision has taken root in policy-making. It is shaping action in many ways. We must persist”, Mr Somavia concluded.